Schizophrenia is a psychiatric disorder with a substantial relapse rate and, often clinical deterioration despite treatment with typical neuroleptic drugs. The atypical neuroleptic drug clozapine (CLOZ) is both effective over the short term and produces long-lasting symptom control for many patients who are resistant or intolerant to the typical drugs. Based on our preliminary data suggesting that attenuation of clinical response may occur during treatment with the typical neuroleptic haloperidol (HAL) but not with CLOZ, we have hypothesized that CLOZ may also be more effective than HAL for patients within their first episode of schizophrenia, and may lead to a better long-term course in these patients. If our hypothesis is correct, CLOZ may be an important first- line treatment for such patients. To test this primary hypothesis as well as relate hypotheses (and to undertake exploratory investigations), we propose to join together 7 sites in "Metro Boston" to recruit patients in their first episode of schizophrenia an to enroll them in a study of the effects of CLOZ and HAL on clinical symptoms, quality of life, and neuropsychological functioning; as part of the study, we also propose to investigate neuroendocrine and biochemical measures obtained from blood and cerebrospinal fluid as predictors and correlates of response to CLOZ and HAL. However, before we apply for funds to fully implement this 5- year "full" study, we propose to recruit 38 patients for a 3-year "feasibility" version of the study. The primary specific aim of the feasibility study is: (l) To gather data about the overall feasibility of implementing the "full" study. The other aims of the feasibility study (based on findings from our group and others about the effects of CLOZ and HAL in more chronic patients) involve obtaining pilot data in first- episode patients: (2a) To compare differential clinical, neuropsychological and quality of life effects of CLOZ and HAL in these patients; (2b) to explore their comparative rates of remission and relapse during treatment with CLOZ add HAL; and (2c) to explore their comparative patterns of response to CLOZ and HAL. (3a) To determine whether after an initial rise in prolactin (PRL) level, a decrease ("fall-off") in PRL occurs in some patients during the first 8 weeks of HAL treatment, and whether this "fall-off" is correlated with an attenuation in clinical response; and (3b) to explore the relationship between change in PRL and clinical response to CLOZ. (4 and 5) To investigate biochemical predictors and correlates of clinical response to CLOZ and/or HAL through study of plasma measures of biogenic amines and metabolites.